There’s a lot of money in professional basketball, and some teams are richer than others. It wouldn’t be fair if the teams with the most financial resources could just pay their way to a championship, year after year after year. That’s why the NBA, like many other sports, implements a salary cap system.
How does the NBA salary cap work, exactly? This article will explore how the league keeps a level playing field.
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What is the NBA Salary Cap?
Understanding NBA payroll and salaries starts with understanding the NBA salary cap.
The NBA’s salary cap is the maximum amount of money that a team is allowed to spend on player payrolls to attract and retain talent on its roster. It’s calculated based on the expected basketball-related income for the coming season, which puts it at $140 million this year.
How Does the NBA Salary Cap Work?
The NBA’s salary cap is intended to work in a way similar to salary caps of other sports, like MLB baseball, NFL football, WNBA basketball and NHL hockey: To ensure a level playing field across the league’s teams, so a single team with loads of money can’t just dominate play by simply outspending their rivals to stack their team.
Some sports have a so-called “hard” salary cap (NHL), where teams cannot exceed the limit under any circumstances. The NBA’s cap is considered a “soft” cap, which gives teams wiggle room to creatively compensate players. Major League Soccer (MLS) and the MLB also have soft caps.
The total amount of money a team has already allocated towards player salaries under the cap is known as the team’s “cap hit” while the amount that team has left to spend is known as its “cap space.”
Teams must spend at least 90% of their salary cap each season to ensure their players are fairly paid. If the teams go over their salary cap, they’re subject to a “luxury tax” penalty on every dollar they spend over the cap. Teams that routinely exceed the cap season-to-season must pay additional penalties.
If a team’s salary spending exceeds the “second apron,” which is currently set at $188 million, the franchise faces additional restrictions on the ways that it can improve its roster. Those penalties can include future draft pick forfeiture.
Whether a team takes strategic advantage of the “soft” nature of the NBA salary cap despite these risks depends on whether they view the future downsides as worth the chance at a title now.
NBA Salary Cap Space by Team, 2024-25
Let’s take a look at each NBA team’s current salary cap situation, from lowest to highest cap hit at the start of the 2024-25 NBA season. And for more insight into money in the NBA, check out the highest paid players and NBA team payrolls.
| Rank | Team | Total Cap Hit | Cap Space |
| 1 | Detroit Pistons | $130.3M | $10.2M |
| 2 | Utah Jazz | $134.7M | $3.1M |
| 3 | San Antonio Spurs | $149.7M | $9.2M |
| 4 | Orlando Magic | $159.2M | $0.0M |
| 5 | Oklahoma City Thunder | $159.5M | $-18.7M |
| 6 | Charlotte Hornets | $161.6M | $-2.0M |
| 7 | Houston Rockets | $164.5M | $-23.9M |
| 8 | Toronto Raptors | $166.7M | $2.8M |
| 9 | Chicago Bulls | $168.5M | $7.9M |
| 10 | Memphis Grizzlies | $168.7M | $-28.1M |
| 11 | Sacramento Kings | $173.7M | $-3.1M |
| 12 | Atlanta Hawks | $177.5M | $35.5M |
| 13 | Los Angeles Clippers | $177.5M | $36.9M |
| 14 | Portland Trail Blazers | $179.2M | $38.6M |
| 15 | Cleveland Cavaliers | $180.8M | $-40.3M |
| 16 | Philadelphia 76ers | $181.5M | $-40.9M |
| 17 | Brooklyn Nets | $182.0M | $-41.5M |
| 18 | New Orleans Pelicans | $182.2M | $-42.5M |
| 19 | New York Knicks | $185.4M | $-44.8M |
| 20 | Dallas Mavericks | $186.8M | $-46.2M |
| 21 | Miami Heat | $191.2M | $50.6M |
| 22 | Denver Nuggets | $194.6M | $54.1M |
| 23 | Indiana Pacers | $195.2M | $4.7M |
| 24 | Golden State Warriors | $201.4M | $-60.8M |
| 25 | Los Angeles Lakers | $202.6M | $-62.0M |
| 26 | Washington Wizards | $203.1M | $-62.5M |
| 27 | Boston Celtics | $203.7M | $-63.8M |
| 28 | Milwaukee Bucks | $209.9M | $-69.0M |
| 29 | Phoenix Suns | $234.5M | $3.9M |
| 30 | Minnesota Timberwolves | $237.7M | $-97.1M |
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Frequently Asked Questions
What is the current NBA salary cap?
The current NBA salary cap is currently set at $140 million.
What is the NBA salary cap for?
The NBA salary cap is designed to ensure a level playing field by limiting the maximum amount of money a team can spend on player salaries.
When did the NBA salary cap start?
The NBA salary cap was first implemented during the 1984-85 season.
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